House Brand Distributor Crest Set To Benefit From Amazon
When The Crest company, lost the rights to several audio brands such as Philips and Sony they turned to developing their own house brands spanning cables, power management and connectivity devices.
The move could prove to be fortuitous for the Brisbane based distributor pending the launch in Australia, of Amazon, the world’s second largest online retailer.
Today, retailers like JB Hi Fi, BigW, Harvey Norman and several discount stores, are lapping up, Crest designed and made products because their products are in demand with consumers and the profit margins are good.
Crest CEO Mike Edson, told ChannelNews that the company who has around since 1977 is currently working on how they can benefit from the arrival of Amazon. “We believe that there are opportunities to grow our business both with our existing retailers in Australia and online with Amazon”.
He said that in certain categories there is no reason why a distributor like The Crest Company cannot sell their own developed products globally on Amazon “especially if we are delivering a quality product, certification and a product that could global appeal with consumers” he said.
Several Analysts who have been researching the potential impact of Amazon in the Australian market have told ChannelNews that distributors who face the biggest problems are the ones who are relying on making margin on branded products.
“Amazon can buy a branded product significantly cheaper than what most Australian distributors can buy the same product for. The other problem that is emerging is that Brands like Amazon because they cut out two layers of costs, distributors and retail marketing or Co-Op dollar incentives”. Said a Catalyst analyst.
Boston Consulting recently briefed the board of JB Hi Fi on the impact that Amazon will have on retailers in Australia. They believe that the impact of Amazon will not be as “severe” as what is being forecast by Citigroup who claim that the arrival of Amazon will hurt the likes of Harvey Norman and JB Hi Fi.
Citigroup says electronics retailers will be hit hardest, with Amazon forecast to capture at least $1.7 billion in sales, or 7 per cent market share, crunching sales and margins at both JB Hi-Fi and Harvey Norman.
The Crest Company believe that they are in a unique position as they have their own brands that are “tailored for online”.
Despite being a strong house brand supplier the company is still distributing several unique brands such as the Smorgasbord power charge kit which is selling extremely well at retailers such as JB Hi Fi and Harvey Norman.
Another brand that the Company is having a lot of success with is the Speck Accessory range.
Edson said that he believes that there are several growth areas ahead for the Company in the Bluetooth and Networking area.
“We also believe that there is still growth left in the headphone market” he added.